After Hurricane Katrina damaged many U.S. gasoline refineries in 2005, the price of gasoline shot up around the country. The Federal Trade Commission announced that it would investigate price gouging-charging "too much"-and several members of Congress called for price controls on gasoline. What would have been the likely effect of such a law had it been passed? Price controls on gasoline would have OA. benefited all consumers because gas prices would have been lower. OB. benefited all producers because there would have been no shortages. OC. resulted in a shortage because demand would have exceeded supply. OD. resulted in a shortage because refiners would have shut down their plants in protest. OE. resulted in a market equilibrium because gas would have been affordable

A government is considering placing a tax on alcohol consumption (demand-side) with the goal of raising revenue in order to finance health care benefits such as Medicare. People who support the tax argue that the demand for alcohol is price inelastic in the short-run. Which of the following statements is true? a.This is a very good way to raise revenue both in the short term and in the long term because there are no substitutes for alcohol. b.No tax revenue can be raised in this way because alcohol sellers will just lower their price by the amount of the tax, and therefore the consumer price of alcohol will not change. c.This tax will not raise much revenue either in the short term or the long term because demand is price inelastic. d.The alcohol tax will raise a lot of revenue in the short-run, but it may not raise as much revenue in the long-run since people will substitute away from alcohol, making the long-run demand for alcohol more elastic.

I am trying to draw a demand curve with quantity on the y axis and price on the x axis - and to then draw the demand curve for 4 products, whose own price elasticity of demand are -0.48, -0.75, - 1.03, -1,31which of these products has the steeper demand curve

This is the market for HOT CHOCOLATE, which is a normal good and is produced with cocoa beans. We know that hot tea is a substitute for hot chocolate and whipped cream is a complement. Quantity Surplus or Price Quantity Supplied Demanded Shortage $5 6,000 10,000 $4 8,000 8,000 $3 10,000 6,000 $2 12,000 4,000 $1 14,000 2,000 1. Complete the table above finding a Shortage or a Surplus. Draw a graphical illustration of the market and find the equilibrium price and equilibrium quantity. For the remaining questions, explain by words or show graphically how equilibrium price and equilibrium quantity of hot chocolate would change (due to changes in Supply or Demand) if: 2. The price of cocoa beans falls; 3. The price of tea falls; 4. Consumer income falls because of a recession.

The table below illustrates the market's demand and supply for cheddar cheese.  Price Per Pound[$] Quantity demanded Quantity Supplied 3.00 320 200 3.50 280 220 4.00 240 240 4.50 200 260 5.00 160 280 What will the excess demand or the shortage(that is, quantity demanded minus quantity supplied) be if the government institutes a price ceiling for cheese of $3.50,

The price elasticity of demand for beer among young adults (age 18 to 24) is about 1.30, and the number of highway deaths is roughly proportional to the group’s beer consumption. If a state imposes a beer tax that increases the price of beer by 20%, by how much will the number of highway deaths among young adults decrease?

a) In the market for sugary drinks, the current equilibrium price is $10 and the equilibrium quantity is 30. The demand choke price is $50 and the supply choke price is $5 (a) Draw a demand and supply diagram, and shade the regions that represent consumer and producer welfare. Calculate the Total welfare in this market b) In this market, you now know that E D = −0.4 and E S = 1.2. Redraw your diagram in part (a) with the correct sloping curves. In this part you do not have to shade the welfare regions. All you need to do is redraw the diagram with the same equilibrium price and quantity, and choke prices but adjust the slope of each curve to reflect their respective elasticity c) If a tax was to be implemented in this market, what percentage of the burden is borne by the buyer? d) The government plans to discourage the consumption of sugary drinks and as such, they implemented a $1 tax on every bottle produced. In this situation, the suppliers are taxed directly but they hope to pass…

What is the equilibrium price? What is the equilibrium quantity? Quantity Demanded 5 6 7 8 9 10 11 Price $7 6 5 4 3 2 1 Quantity Supplied 9 8 7 6 5 4 3

Your firm receives revenue of $40MM per year from Product A and $90MM per year from Product B. The own- price elasticity of demand for Product A is -1.5. The cross-price elasticity of demand between Product A and Product B is -1.8. Suppose you increase the price of Product A by two percent:   a. How much will Product A’s revenue change?   b. How much will Product B’s revenue change?

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